Exhibit 10.1 


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of December 28, 2016, between Guided Therapeutics, Inc.,
a Delaware corporation (the “Company”), and the purchaser identified on the signature pages hereto (including its successors
and assigns, the “Purchaser”). 


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), the Company desires to issue and sell to the Purchaser, and the Purchaser, desires
to purchase from the Company, securities of the Company as more fully described in this Agreement.


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows: 


 


ARTICLE
I. 


DEFINITIONS



 


1.1
  Definitions.  In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms
that are not otherwise defined herein have the meanings given to such terms in the Notes (as defined herein), and (b) the
following terms have the meanings set forth in this Section 1.1:


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(j).


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act. 


 


“Board
of Directors” means the board of directors of the Company.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any
day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.


 


“Closing
Dates” means the Trading Day(s) on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto in connection with a Closing, and all conditions precedent to (i) the Purchasers’ obligations to pay
the Subscription Amount as to such Closing and (ii) the Company’s obligations to deliver the Securities as to such Closing,
in each case, have been satisfied or waived.


 


“Closing(s)”
means the one or more closings of the purchase and sale of the Securities pursuant to Section 2.2.


 


“Closing
Statement” means the Closing Statement in the form on Annex A attached hereto.


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Common
Stock” means the common stock of the Company, par value $0.001 per share, and
any other class of securities into which such securities may hereafter be reclassified or changed. 


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock. 


 


“Conversion
Price” shall have the meaning ascribed to such term in the Notes.


 


“Conversion
Shares” shall have the meaning ascribed to such term in the Notes.


 


“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.


  


“Equity
Incentive Plan” means the Company’s 1995 Stock Plan, as amended.


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 


 


“Exempt
Issuance” means the issuance of (a) securities to employees, officers or directors of, or consultants to, the Company, pursuant
to any stock or option plan duly adopted for such purpose, or upon approval by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder, and/or other
Common Stock Equivalents issued and outstanding on the date of this Agreement, provided that such securities have not been amended
since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or
conversion price of such securities (other than automatically pursuant to their terms, or in connection with stock splits or combinations)
or to extend the term of such securities, (c) securities issued pursuant to any purchase money equipment loan or capital leasing
arrangement approved by the Collateral Agent under the Security Agreement, purchasing agent or debt financing from a commercial
bank or similar financial institution, (d) securities in full or partial consideration in connection with a bona fide strategic
merger, acquisition, consolidation or purchase of all or substantially all of the securities or assets of a corporation or other
entity, so long as such issuance is not for the primary purpose of raising capital by the Company; (e) securities in connection
with a bona fide strategic license agreement, sponsored research agreement, collaboration agreement, development agreement, OEM
agreement, marketing or distribution agreement, or other bona fide partnering arrangement, so long as such issuance is not for
the primary purpose of raising capital by the Company; (f) securities to a bank or other financial institution pursuant to a bona
fide commercial debt financing or to equipment lessor pursuant to a bona fide equipment leasing agreement; and (g) securities upon
a stock split, stock dividend or subdivision of the Common Stock.


 


“First
Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).


 


“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).


 


“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m). 


 


“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.


 


“Notes”
means the 10% Original Issue Discount Convertible Promissory Notes due, subject to the terms therein, six (6) months from their
date of issuance, issued by the Company to the Purchaser hereunder, in the form of Exhibit A attached hereto.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 


 


“Principal
Amount” means, as to the Purchaser, the amounts set forth below the Purchaser’s signature block on the signature pages
hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal the Purchaser’s Subscription
Amount as to the applicable Closing, multiplied by 1.10. 


 


“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.12(e).


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened. 


 


“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b). 


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.


  


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock potentially issuable in the future
pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion in full of the then-outstanding
principal of all Notes and including Underlying Shares issuable as payment of interest on the Notes, ignoring any conversion or
exercise limits set forth therein, and assuming that the Conversion Price is at all times on and after the date of determination
100% of the then Conversion Price on the Trading Day immediately prior to the date of determination. 


 


“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


 


“Securities”
means the Notes and the Underlying Shares. 


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act 


 


“Subscription
Amount” means, as to the Purchaser, the aggregate amount to be paid for Notes purchased hereunder as specified below the
Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United
States dollars and in immediately available funds. 


 


“Subsidiary”
means InterScan, Inc., a wholly owned subsidiary of the Company without any assets or liabilities as of the date hereof, and shall,
where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof. 


 


“Trading
Day” means a day on which the principal Trading Market is open for trading. 


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE MKT; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; the New York
Stock Exchange; OTC Markets or the OTC Bulletin Board (or any successors to any of the foregoing). 


 


“Tranche(s)”
shall have the meaning ascribed to such term in Section 2.1. 


 


“Transaction
Documents” means this Agreement, the Notes, the Transfer Agent Instruction Letter, all exhibits and schedules thereto and
hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder. 


 


“Transfer
Agent” means Computershare Investor Services LLC, the current transfer agent of the Company, with a mailing address of 2
North LaSalle Street, Chicago, IL 60602 and any successor transfer agent of the Company. 


 


“Transfer
Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue
Underlying Shares pursuant to the Transaction Documents, in substantially the form of Exhibit B attached hereto. 


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Notes and issued and issuable
in lieu of the cash payment of interest on the Notes in accordance with the terms of the Notes.


 


 


ARTICLE
II. 


PURCHASE
AND SALE 


 


2.1
  Purchase.  The Purchasers will purchase an aggregate of up to $300,000 in Subscription Amount corresponding
to an aggregate of up to $330,000 in Principal Amount of Notes. The purchase will occur in up to two (2) tranches of (each a “Tranche,”
and collectively the “Tranches”), with the first Tranche of $200,000 being closed upon execution of this Agreement
(the “First Closing”). The Company may opt, in its sole discretion, to issue the second Tranche for $100,000 at any
time within sixty (60) days after the First Closing. Notwithstanding the foregoing, the Purchaser shall not be required
to fund the second Tranche if: (i) the Company is in default of the first Note issued at
the First Closing; (ii) the Company, its Subsidiaries, or any of the directors or officers of the Company or its Subsidiaries commit
fraud; (iii) the Company or its Subsidiaries breach any covenant contained herein or in the other Transaction Documents in any
material respect and such covenant breach is not cured within five (5) days of written notice therefor; (iv)  if the Equity
Conditions (as defined in the Notes) are not met on such Closing Date (with the exception of the “average daily dollar volume”
condition contained within the definition of “Equity Conditions”), provided that the Company shall have thirty (30)
days to cure any such failure; or (v) a new transfer agent instruction letter or an amendment to the Transfer Agent Instruction
Letter is not executed by and among the Company, the Purchaser, and the Transfer Agent, to comply with Section 4.10 herein (for
the avoidance of doubt, to evidence the increase of aggregate principal and interest due under the Notes).


 


2.2
  Closing.  On each Closing Date, upon the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchaser
agrees to purchase, the Purchaser’s Closing Subscription Amount as set forth on the signature page hereto executed by the
Purchaser (an aggregate of up to $300,000 in Subscription Amount corresponding to an aggregate of up to $330,000 in Principal Amount
of Notes).  At each Closing, the Purchaser shall deliver to the Company, via wire transfer, immediately available funds
equal to the Purchaser’s Subscription Amount as set forth on the signature page hereto executed by the Purchaser, and the
Company shall deliver to the Purchaser its respective Note, as determined pursuant to Section 2.3(a), and the Company and
the Purchaser shall deliver the other items set forth in Section 2.3 deliverable at the First Closing.  Upon satisfaction
of the covenants and conditions set forth in Sections 2.3 and 2.4 for each Closing, each Closing shall occur at the offices
of the Company’s counsel or such other location as the parties shall mutually agree.


 


2.3
  Deliveries.


 


(a)
  On or prior to each Closing Date (except as noted), the Company shall deliver or cause to be delivered to the Purchaser
the following:


 


(i)  
as to the First Closing, this Agreement duly executed by the Company;


 


(ii)
 the Transfer Agent Instruction Letter duly executed by the Company and the Transfer Agent; 


 


(iii)
 a Note with a principal amount equal to the Purchaser’s Principal Amount as to the applicable Closing, registered in
the name of the Purchaser; and


 


(iv)
as to the First Closing, a copy of the duly executed resolutions of the Board of Directors approving the Transaction Documents,
all documents related thereto, and all transactions contemplated by the Transaction Documents. 


 


(b)
  On or prior to the applicable Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, as applicable,
the following:


 


(i)
  as to the First Closing, this Agreement duly executed by the Purchaser; and


 


(ii)
the Purchaser’s Subscription Amount as to the applicable Closing by wire transfer to the account specified in writing by
the Company.2.4   Closing Conditions.


 


(a)
  The obligations of the Company hereunder in connection with each Closing are subject to the following conditions being met:


 


(i)
 the accuracy in all material respects on the applicable Closing Date of the representations and warranties of the Purchaser
contained herein (unless as of a specific date therein, in which case they shall be accurate as of such date);


 


(ii)
 all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the applicable Closing
Date shall have been performed; and


 


(iii)
 the delivery by the Purchaser of the items set forth in Section 2.3(b) of this Agreement.


 


(b)
  The respective obligations of the Purchaser hereunder in connection with each Closing are subject to the following conditions
being met:


 


(i)
  the accuracy in all material respects when made and on the applicable Closing Date of the representations and warranties
of the Company contained herein (unless as of a specific date therein, in which case they shall be accurate in all material respects
as of such date);


 


(ii)
 all obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing Date
shall have been performed;


 


(iii)
 the delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;


 


(iv)
  there is no existing Event of Default (as defined in the Notes) and no existing event which, with the passage of time or
the giving of notice, would constitute an Event of Default;


 


(v)
  there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and


  


(vi)
  from the date hereof to the applicable Closing Date, trading in the Common Stock shall not have been suspended by the Commission  or
the Company’s principal Trading Market and, at any time prior to the applicable Closing Date, trading in securities generally
as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by
the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of the Purchaser, and without regard to any factors unique to the Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the applicable Closing.


 


ARTICLE
III. 


REPRESENTATIONS
AND WARRANTIES 


 


3.1
  Representations and Warranties of the Company.  Except as set forth in the Disclosure Schedules, which
Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent
of the disclosure contained in the corresponding section of the Disclosure Schedules, or in the SEC Reports, the Company (which
for purposes of this Section means the Company and all of its Subsidiaries) hereby makes
the following representations and warranties to the Purchaser as of the date hereof:


 


(a)
  Subsidiaries.  The Subsidiary is the only subsidiary of the Company. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or
any of them in the Transaction Documents shall be disregarded.


 


(b)
 Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with
the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect
on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole;
or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power
and authority or qualification.


  


(c)
  Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into
and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors
or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals.  This
Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation
of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.


 


(d)
  No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction
Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien
(except Liens in favor of the Purchaser) upon any of the properties or assets of the Company or any Subsidiary, or give to others
any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which
the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected;
or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected
to result in a Material Adverse Effect.


  



(e)
  Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.6 of this Agreement; (ii) the notice and/or application(s)
to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Conversion Shares for trading
thereon in the time and manner required thereby; and (iii) such filings as are required to be made under applicable federal
and state securities laws (collectively, the “Required Approvals”).


 


(f)
  Issuance of the Securities.  The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Underlying
Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The
Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares
at least equal to 300% of the Required Minimum on the date hereof.


 


(g)
  Capitalization.  The capitalization of the Company is as set forth on Schedule 3.1(g), which
Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates
of the Company as of the date hereof. The Company has not issued any capital stock since its most recently filed periodic report
under the Exchange Act, other than pursuant to the exercise of employee stock options under the Equity Incentive Plan, the issuance
of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion
and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange
Act.   No Person has any right of first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the
Securities and securities issued to employees and other service providers of the Company pursuant to the Equity Incentive Plan,
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  The
issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person
(other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No
further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of
the Securities.  There are no stockholders agreements, voting agreements or other similar agreements with respect to
the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of
the Company’s stockholders.


 


(h)
  SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a)
or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”).  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading.  The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The
financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial
statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the
notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. 


 


(i)                     
Material Changes; Undisclosed Events, Liabilities or Developments.  Since
the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent
SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect; (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission; (iii) the Company has not altered its method of accounting; (iv) the
Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its capital stock; and (v) the
Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to the Equity Incentive Plan.  Except
for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development
has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective
businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least
one (1) Trading Day prior to the date that this representation is made. 


 


(j)
  Litigation.   Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties, or against or affecting the Company’s current or former officers
or directors in their capacity as such, before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign), including, without limitation, the
Commission (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability
of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably
be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary, nor any director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the
Company that is likely to lead to action that can reasonably be expected to result in a Material Adverse Effect. There has not
been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or officer of the Company.   The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.


 


(k)
  Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect
to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the
Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship
with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge
of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement,
or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each
such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing
matters.  The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.


 


(l)
  Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or violation has been waived); (ii) is in violation
of any judgment, decree or order of any court, arbitrator or other governmental authority; or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority, including without limitation, any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof and as of the applicable Closing Date, the Foreign
Corrupt Practices Act of 1977, as amended, the Currency and Foreign Transactions Reporting Act of 1970, as amended (and
further, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any Subsidiary with respect to such money laundering laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened), all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any of its predecessors,
predecessors in interest, any affiliated issuer, any director, executive officer, other officer of the Company participating in
the offering hereunder, any beneficial owner of ten percent (10%) or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, or any promoter (as that term is defined in Rule 405 under the Securities Act) connected
with the Company in any capacity at the time of sale is subject to any of the “Bad Actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”).


  



(m)
  Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in
a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any Material Permit.


 


(n)
  Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all
real property owned by them and good and marketable title in all personal property owned by them that is material to the business
of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect
the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property
and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance.


 


(o)
  Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and
other intellectual property rights and similar rights as necessary or required for use in connection with their respective businesses
as presently conducted and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not
have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.


 


(p)
  Transactions with Affiliates and Employees.  None of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000
other than for: (i) payment of salary or consulting fees for services rendered; (ii) reimbursement for expenses incurred
on behalf of the Company; and (iii) other employee benefits, including stock option or stock award agreements under the Equity
Incentive Plan. 


 


(q)
  Internal Accounting Controls.   The Company and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries
have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company
and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by
the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness
of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in
its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness
of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act)
that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the
Company and its Subsidiaries.


 


(r)
  Certain Fees.  Except for fees payable to Moody Capital Solutions, Inc., set forth on Annex A, no
brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents.  The Purchasers shall have no obligation with respect to any fees or with respect to any
claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with
the transactions contemplated by the Transaction Documents.


  


(s)
  Private Placement.  Assuming the accuracy of the Purchaser’s representations and warranties set forth
in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to
the Purchaser as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations
of the Trading Market.


 


(t)
  Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for
the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an “investment
company” subject to registration under the Investment Company Act of 1940, as amended.


 


(u)
  Registration Rights.   No Person has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company or any Subsidiaries.


 


(v)
  Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect
of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that
the Commission is contemplating terminating such registration.  The Company has not, in the three (3) months preceding
the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance
requirements.


 


(w)
  Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of
the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of the Securities and the Purchaser’s ownership of the Securities.


 


(x)
  Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of
the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public
information. The Company understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions
in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made,
not misleading.    The press releases disseminated by the Company during the twelve months preceding the
date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.


 


(y)
  No Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in
Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would
cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities
Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder
approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.


 


(z)
  No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any
of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only
to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities
Act.


 


(aa)
  Reserved.


 


(bb)
  Accountants.   To the knowledge and belief of the Company, the Company’s accounting firm is a registered
public accounting firm as required by the Exchange Act.


 


(cc)
  No Disagreements with Accountants.  There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants which could affect the Company’s ability to perform
any of its obligations under any of the Transaction Documents.


 


(dd)
  Acknowledgment Regarding Purchaser’s Purchase of Securities.  The Company acknowledges and agrees
that the Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that the Purchaser is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
thereby and any advice given by the Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The
Company further represents to the Purchaser that the Company’s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


  


(ee)
  Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to
the Company’s placement agent in connection with the placement of the Securities.


 


(ff)
  Stock Option Plans. Each stock option granted by the Company under the Equity Incentive Plan was granted (i) in
accordance with the terms of the Equity Incentive Plan, and (ii) with an exercise price at least equal to the fair market
value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option
granted under the Equity Incentive Plan has been backdated.  The Company has not knowingly granted, and there is no and
has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant
of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.


 


(gg)
  Office of Foreign Assets Control.  Neither the Company nor any Subsidiary nor, to the Company's knowledge,
any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


(hh)
  U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding
corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify
upon Purchaser’s request.


 


(ii)
  Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to
the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal
Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.


 


(jj)
Solvency. Based on the consolidated financial condition of the Company as of the applicable Closing Date, after giving
effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value
of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing
debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected
capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds
the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash,
would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to
believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within
one year from the applicable Closing Date. The SEC Reports set forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of
this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $100,000
(other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000
due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness.


 


(kk) Tax Status. Except
for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and
(iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.


 


(ll) Seniority. As of
each Closing Date, no Indebtedness or other claim against the Company is senior to the Notes in right of payment, whether with
respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security
interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as
to the property covered thereby).


 


(mm)Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) the Purchaser has not
been asked by the Company to agree, nor has the Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for
any specified term; (ii) past or future open market or other transactions by the Purchaser, specifically including, without limitation,
Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions,
may negatively impact the market price of the Company’s publicly-traded securities; (iii) the Purchaser, and counter-parties
in “derivative” transactions to which the Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock; and (iv) the Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges that
(y) the Purchaser may engage in hedging activities at various times during the period that the Securities are outstanding, including,
without limitation, during the periods that the value of the Underlying Shares deliverable with respect to Securities are being
determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the
Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the Transaction Documents.


 


(nn) Reserved.


 


(oo)Subsidiary
Rights. The Company has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends
and distributions on, all capital securities of its Subsidiaries as owned by the Company or any Subsidiary.


 


3.2
  Representations and Warranties of the Purchasers. The Purchaser hereby represents and warrants as of the date hereof
and as of the Closing Date to the Company as follows (unless as of a specific date therein):


 


(a)
  Organization; Authority.  The Purchaser is either an individual or an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate,
partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of
the Transaction Documents and performance by the Purchaser of the transactions contemplated by the Transaction Documents have been
duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part
of the Purchaser.  Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when
delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the
Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 


(b)
  Own Account.  The Purchaser understands that the Securities are “restricted securities” and
have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation
of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any
other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable
state securities law (this representation and warranty not limiting the Purchaser’s right to sell the Securities in compliance
with applicable federal and state securities laws).  The Purchaser is acquiring the Securities hereunder in the ordinary
course of its business.


 


(c)
  Purchaser Status.  At the time the Purchaser was offered the Securities, it was, and as of the date hereof
it is, and on each date on which it converts any Notes it will be an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.


 


(d)
  Experience of the Purchaser.  The Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks
of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  The Purchaser
is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss
of such investment.


 


(e)
  General Solicitation.  The Purchaser is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general solicitation or general advertisement.


 


(f)
  Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder,
the Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the
Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing
as of the time that the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing
the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution
hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of the Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of the Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made
the investment decision to purchase the Securities covered by this Agreement.  Other than to other Persons party to this
Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall
constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or
securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.


 


The
Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect the Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transaction contemplated hereby. 


 



ARTICLE
IV. 


OTHER
AGREEMENTS OF THE PARTIES 


 


4.1
  Transfer Restrictions.


 


(a)
  The Securities may only be disposed of in compliance with state and federal securities laws.  In connection with
any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate
of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company and the Transfer
Agent, the form and substance of which opinion shall be reasonably satisfactory to the Company and the Transfer Agent, to the effect
that such transfer does not require registration of such transferred Securities under the Securities Act.  For the avoidance
of doubt, the Company shall use commercially reasonable efforts to cause the Transfer Agent to accept the form of opinion of counsel
provided by the transferor. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of
this Agreement and shall have the rights and obligations of a Purchaser under this Agreement. 


 


(b)
  The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities
in the following form:


 


[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [CONVERTIBLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS
SECURITY [AND THE SECURITIES ISSUABLE UPON [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES. 


 


The
Company acknowledges and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured Securities to the pledgees
or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of
legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice
shall be required of such pledge.  At the Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the
Securities. 


 


(c)
  Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b)
hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act; (ii) following
any sale of such Underlying Shares pursuant to Rule 144; (iii) if such Underlying Shares are eligible for sale under Rule 144;
or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission). The Company shall upon request of a Purchaser and at the Company’s
expense cause its counsel (or, at the Company’s request, counsel recommended by the Purchaser and reasonably acceptable to
the Transfer Agent) to issue a legal opinion to the Transfer Agent promptly after any of the events described in (i)-(iv) in the
preceding sentence if required by the Transfer Agent to effect the removal of the legend hereunder (with a copy to the applicable
Purchaser and its broker). If all or any portion of a Note is converted at a time when there
is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under
Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission) then such Underlying Shares shall be issued free of all legends (for
the avoidance of doubt, the Company shall use commercially reasonable efforts to cause the Transfer Agent to issue such Underlying
Shares).  The Company agrees that following such time as such legend is no longer required under this Section 4.1(c),
it will, no later than two (2) Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate
representing Underlying Shares, as applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal
Date”), instruct the Transfer Agent to deliver or cause to be delivered to the Purchaser a certificate representing such
shares that is free from all restrictive and other legends.   The Company shall use commercially reasonable efforts to
cause certificates for Underlying Shares subject to legend removal hereunder to be transmitted by the Transfer Agent to the Purchaser
by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by the Purchaser.
The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on
transfer set forth in this Section 4.  .


 


(d)
In addition to the Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, $500 per Trading Day for each Trading Day after the Legend Removal Date until such certificate is
delivered without a legend. Nothing herein shall limit the Purchaser’s right to pursue actual damages for the Company’s
failure to deliver certificates representing any Securities as required by the Transaction Documents, and the Purchaser shall have
the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief. 


 


4.2
  Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Securities may result in
dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.  Provided
that the Purchaser has not committed any materially negative and willful act against the Company (e.g., Short Sales prohibited
under Section 4.12 herein, intentional acts constituting libel or slander against the Company), the Company further acknowledges
that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares
pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay
or reduction, regardless of the effect of any such dilution or any claim the Company may have against the Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.


 


4.3
  Furnishing of Information; Public Information.


 


(a)
  For as long as any of the Notes remain outstanding, the Company covenants to maintain the registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even
if the Company is not then subject to the reporting requirements of the Exchange Act.


 


(b)    At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of
the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to the Purchaser’s other available
remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such
delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription
Amount of the Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th)
day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the
Underlying Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b)
are referred to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall
be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are
incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments
is cured.  In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public
Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in
full. Nothing herein shall limit the Purchaser’s right to pursue actual damages for the Public Information Failure, and the
Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief. 


 


4.4
  Integration.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would
be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that
it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction. 


 


4.5
  Conversion and Exercise Procedures.  The form of Notice of Conversion included in the Notes sets forth
the totality of the procedures required of the Purchaser in order to convert the Notes.  Without limiting the preceding
sentences, no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Conversion form be required in order to convert the Note.  No additional legal opinion,
other information or instructions shall be required of the Purchaser to convert their Notes.  The Company shall honor
conversions of the Notes and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth
in the Transaction Documents.


 


4.6
  Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the
Company, any other Person, that the Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in
effect or hereafter adopted by the Company, or that the Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company
and the Purchasers.


 


4.7.  
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
covenants and agrees that neither it, nor any of its subsidiaries, nor any other Person
acting on its behalf, will provide the Purchaser or its agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such information is disclosed to the public, or the
Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such information.  The
Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.


 


4.8
  Use of Proceeds.  The Company shall use the net proceeds hereunder at its sole discretion.


 


4.9
  Indemnification of Purchaser.   Subject to the provisions of this Section 4.9, the Company will indemnify
and hold the Purchaser and its directors, officers, managers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title),
each Person who controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, managers, shareholders, agents, members, partners or employees (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons
(each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any the Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents
or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of the Purchaser Party, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is based upon a breach of the Purchaser Party’s representations, warranties
or covenants under the Transaction Documents or any agreements or understandings the Purchaser Party may have with any such stockholder
or any violations by such  Purchaser Party of state or federal securities laws or any conduct by the Purchaser Party
which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, the Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the
Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and
the position of the Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this Agreement (x)
for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (y) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by the Purchaser Party in
this Agreement or in the other Transaction Documents.  The indemnification required by this Section 4.10 shall be made
by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or
are incurred.  The indemnification contained herein shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.


 



4.10   Reservation
and Listing of Securities.


 


(a)
  The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. 


 


(b)
  If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 300%
of the Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s
certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least 300%
of the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.


 


(c)
  The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file
with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to
the Required Minimum on the date of such application; (ii) take all steps necessary to cause such shares of Common Stock to be
approved for listing or quotation on such Trading Market as soon as possible thereafter; (iii) provide to the Purchasers evidence
of such listing or quotation; and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the
Required Minimum on such date on such Trading Market or another Trading Market.


 


4.11
  Reserved.


 


4.12
  Certain Transactions and Confidentiality. For as long as the Purchaser beneficially owns any of the Notes, neither
the Purchaser, nor any Affiliate acting on its behalf or pursuant to any understanding with it, will execute any Short Sales of
any of the Company’s securities (provided that this provision shall not prohibit any sales made where a corresponding Notice
of Conversion is tendered to the Company and the shares received upon such conversion or exercise are used to close out such sale). 


 


4.13
Reserved.


 


4.14
Securities Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K, including the Transaction
Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the filing of such
report, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or
agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchaser shall consult
with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company
nor the Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of
the Company, with respect to any press release of the Purchaser, or without the prior consent of the Purchaser, with respect to
any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required
by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchaser, or include the
name of the Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent
of the Purchaser, except: (a) as required by federal securities law and (b) to the extent such disclosure is required by law or
Trading Market regulations, in which case the Company shall provide the Purchaser with prior notice of such disclosure permitted
under this clause (b). Notwithstanding the foregoing, the Company shall not be required to submit for review any such disclosure
contained in filings with the Commission if it shall have previously provided the same disclosure for review in connection with
a previous filing.


 


4.15 Blue Sky Filings. The
Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to
qualify the Securities for, sale to the Purchaser at the applicable Closing under applicable securities or “Blue Sky”
laws of the states of the United States, and shall provide evidence of such actions promptly upon request of the Purchaser.


 


4.16Exchange Transactions.
During the period commencing on the date hereof and for so long as any of the Notes remain outstanding, neither the Company nor
any of its affiliates or Subsidiaries, nor any of its or their respective officers, employees, directors, agents or other representatives,
will, without the prior written consent of the Purchaser (which consent may be withheld, delayed or conditioned in the Purchaser’s
sole discretion), directly or indirectly: (a) solicit, initiate, encourage or accept any other inquiries, proposals or offers from
any Person (other than the Purchaser) relating to any exchange of any indebtedness or other securities of, or claim against, the
Company or any of its Subsidiaries relying on the exemption provided by Section 3(a)(10)
of the Securities Act (any such transaction described in clause (a), an “Exchange Transaction”); (b) enter into,
effect, alter, amend, announce or recommend to its stockholders any Exchange Transaction with any Person (other than the Purchaser);
or (c) participate in any discussions, conversations, negotiations or other communications with any Person (other than the Purchaser)
regarding any Exchange Transaction, or furnish to any Person (other than the Purchaser) any information with respect to any Exchange
Transaction, or otherwise cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any
Person (other than the Purchaser) to seek an Exchange Transaction involving the Company or any of its Subsidiaries. During the
period commencing on the date hereof and for so long as any of the Notes remain outstanding, if the Company completes an exchange
of securities or debt pursuant to Section 3(a)(9) of the Securities Act with an existing holder of any securities or debt of the
Company, such exchange shall be deemed to trigger, if applicable, Section 5(b) of the Note, regardless of whether the newly issued
security is part of a “Variable Rate Transaction” (as defined in the Notes) and in such case, if applicable, the Notes
shall be amended pursuant to Section 5(b) of the Notes. In addition, for so long as
any of the Notes remain outstanding, neither the Company nor any of its affiliates or Subsidiaries, nor any of its or their respective
officers, employees, directors, agents or other representatives, will, without the prior written consent of the Purchaser (which
consent may be withheld, delayed or conditioned in the Purchaser’s sole discretion), directly or indirectly, cooperate in
any way, assist or participate in, facilitate or encourage any effort or attempt by any Person (other than the Purchaser)
to effect any acquisition of securities or indebtedness of, or claim against, the Company by such Person from an existing holder
of such securities, indebtedness or claim in connection with a proposed exchange of such securities or indebtedness of, or claim
against, the Company (whether pursuant to Section 3(a)(9) or 3(a)(10) of the Securities Act or otherwise) (a “Third Party
Exchange Transfer”), except to the extent the Company is, prior to the date hereof, contractually (and in writing) obligated
to do so. The Company, its affiliates and Subsidiaries, and each of its and their respective officers, employees, directors,
agents or other representatives shall immediately cease and cause to be terminated all existing discussions, conversations, negotiations
and other communications with any Persons (other than the Purchaser) with respect to any of the foregoing,
except to the extent the Company is, prior to the date hereof, contractually (and in writing) obligated to do so. The Company
shall promptly (and in no event later than 24 hours after receipt) notify (which notice shall be provided orally and in writing
and shall identify the Person making the inquiry, request, proposal or offer and set forth the material terms thereof) the Purchaser
after receipt of any inquiry, request, proposal or offer relating to any Exchange Transaction or Third Party Exchange Transfer,
and shall promptly (and in no event later than 24 hours after receipt) provide copies to the Purchaser of any written inquiries,
requests, proposals or offers relating thereto, except to the extent the Company is, prior
to the date hereof, contractually (and in writing) obligated to do so.  The Company agrees that it and its affiliates
and Subsidiaries, and each of its and their respective officers, employees, directors, agents or other representatives Subsidiaries
will not enter into any agreement with any Person subsequent to the date hereof which prohibits the Company from providing any
information to the Purchaser in accordance with this provision.  For all purposes of this Agreement, violations of the
restrictions set forth in this Section 4.16 by any Subsidiary or affiliate of the Company, or any officer, employee, director,
agent or other representative of the Company or any of its Subsidiaries or affiliates shall be deemed a direct breach of this Section
4.16 by the Company. For the avoidance of doubt, the Company shall not without the prior written consent of the Purchaser (which
consent may be withheld, delayed or conditioned in the Purchaser’s sole discretion), directly or indirectly consummate an
Exchange Transaction or a Third Party Exchange Transfer if such exchange involves a third party (i.e., a Person that is
neither the Company nor any existing security or debt holder of the Company), except to the
extent the Company is, prior to the date hereof, contractually (and in writing) obligated to do so.


 


 


 


 


ARTICLE
V. 


MISCELLANEOUS



 


5.1
  Termination.  This Agreement may be terminated by the Purchaser, as to the Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the
other parties, if the First Closing has not been consummated on or before January 6, 2017; provided, however, that such termination
will not affect the right of any party to sue for any breach by any other party (or parties).


 


5.2
  Fees and Expenses.   The Company has agreed to reimburse the Purchaser’s legal counsel $10,000
for its legal fees. The Company shall deliver to the Purchaser, prior to the First Closing, a completed and executed copy of the
Closing Statement, attached hereto as Annex A. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all transfer agent fees (including, without limitation, any fees required for same-day processing of any
instruction letter delivered by the Company and any Notice of Conversion delivered by the Purchaser), stamp taxes and other taxes
and duties levied in connection with the delivery of the Underlying Shares to the Purchaser.


 


5.3
  Entire Agreement.  The Transaction Documents, together with the exhibits, annexes, and schedules thereto,
contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules.


 


5.4
  Notices.  Any and all notices or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the earliest of: (i) the date of transmission, if such
notice or communication is delivered via email or facsimile at the email address or facsimile number set forth on the signature
pages attached hereto at or prior to 12:00 p.m. (New York City time) on a Trading Day; (ii) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature
pages attached hereto on a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day; (iii)
the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service; or (iv) upon actual receipt by the party to whom such notice is required to be given.  The address for such
notices and communications shall be as set forth on the signature pages attached hereto.


 


5.5
  Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the Company and the Purchaser, or, in the case of a waiver, by
the party against whom enforcement of any such waived provision is sought.  No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of any such right.


 


5.6
  Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof.


 


5.7
  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser (other than by merger).  The Purchaser may assign any or all of its
rights under this Agreement to any Person to whom the Purchaser assigns or transfers any Securities, provided that such transferee
agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that
apply to the “Purchaser”.


 


5.8
  No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.10.


 


5.9
  Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of
the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.   If either party shall commence an action, suit or proceeding to enforce
any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.


 


5.10
  Survival.  The representations and warranties contained herein shall survive the Closings and the delivery
of the Securities.


 


5.11
  Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to each other party, it being understood that the parties need not sign the same counterpart.  In the event
that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with
the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.


 


5.12
  Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, as long as the essential terms
and conditions of this Agreement for each party remain valid, binding, and enforceable. The parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable. 


 


5.13
  Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting
any similar provisions of) any of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein
provided, then the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company,
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of a conversion of a Note, the applicable Purchaser shall be required to return any shares of
Common Stock subject to any such rescinded conversion notice concurrently with the return to the Purchaser of the aggregate exercise
price paid to the Company for such shares.


 


5.14
  Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof
(in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate
or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated
with the issuance of such replacement Securities.


5.15
  Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including
recovery of damages, the Purchaser and the Company will be entitled to specific performance under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


 


5.16
  Payment Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 


5.17
  Usury.  To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in
any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws
wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought
by the Purchaser in order to enforce any right or remedy under any Transaction Document.  Notwithstanding any provision
to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company
under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated
to pay under the Transaction Documents exceed such Maximum Rate.  It is agreed that if the maximum contract rate of interest
allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action
subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law.  If
under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Purchaser with respect
to indebtedness evidenced by the Transaction Documents, such excess shall be applied by the Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Purchaser’s election.


 


5.18
  Reserved.


 


5.19
  Liquidated Damages.  The Company’s obligations to pay any partial liquidated damages or other amounts
owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial
liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which
such partial liquidated damages or other amounts are due and payable shall have been canceled.


 


5.20
Reserved.


 


5.21
  Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.


 


5.22
  Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.


 


5.23
  WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST
ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 


 


 


[Signature
Pages Follow]


 






    	 		 



     

    

 


 


 


IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above. 


 


	
        GUIDED THERAPEUTICS,
        INC. 

         

         

         
	
        Address for Notice:
        5835 Peachtree Corners East, Suite D

        Norcross, Georgia 30092

	
        By:/s/
Gene S. Cartwright

             Name:
Gene S. Cartwright

             Title: President and Chief Executive Officer

         

        With a copy to (which
        shall not constitute notice): 

         

        ____________________________

        ____________________________

        ____________________________
	 


 


 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK 


SIGNATURE
PAGE FOR PURCHASER FOLLOWS] 


 


 


 


 




 


 


 


 


 






    	 		 



     

    

 


 


 


[PURCHASER
SIGNATURE PAGES TO GUIDED THERAPEUTICS, INC. SECURITIES PURCHASE AGREEMENT] 


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above. 


 


Name of Purchaser: RedDiamond
Partners LLC 


 


Signature of Authorized
Signatory of Purchaser: /s/ RedDiamond Partners                                                                              



 



Name of Authorized
Signatory: ____________________________________                                                                                                                               



Title of Authorized
Signatory: ____________________________________                                                                                                                               



Email Address of Authorized
Signatory: ____________________________________                                                                                                            



Facsimile Number of
Authorized Signatory: ____________________________________                                                                                                        



Address for Notice
to Purchaser: 


 


 


 


Address for Delivery
of Securities to Purchaser (if not same as address for notice): 


 


 


 


First Closing Principal
Amount: $220,000


  



First Closing Subscription
Amount: $200,000


 


Second Closing Principal
Amount: $110,000


  



Second Closing Subscription
Amount: $100,000


 


 


EIN Number: _______________________